One picture explains why natural gas is trading at a 10 year low price.

http://ir.eia.gov/ngs/ngs.html

Natural gas storage smooths out the supply picture. Gas is not needed for space heating in summer, so excess production can be stored underground (in salt caverns or depleted reservoirs). Storage is then “drawn down” in wintertime when space heating demand may outstrip deliverability from producing fields.

Now, there’s lots of excess gas. Storage didn’t draw down much due to a warm winter in the Lower 48. Sets a stage for a grim summertime if you’re a producer. If you’re a consumer, however, it’s a Blue Light Special.

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One Response to One picture explains why natural gas is trading at a 10 year low price.

  1. Roge says:

    “Now, there’s lots of excess gas.”

    My Aunt Ethel would always tell me that. Of course, it was also my cue to leave the room…

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